An expected increase in US government funding to strengthen Puerto Rico's healthcare systemwill support pharmaceutical and healthcare sector growth in the commonwealth over the next few years.While the US administration will continue to seek legislative removal of Puerto Rico's Medicaid fundinglimitations over the coming months, the increasing risk posed by the Zika virus outbreak in the territory willpush for a rise in healthcare funding to become a priority. That said, market growth rates in severalsegments, including pharmaceuticals, are set to face headwinds due to Puerto Rico's economic recession.

Headline Expenditure Projections

- Pharmaceuticals: USD3.81bn in 2015 to USD3.82bn in 2016; +0.2%. Forecast in line with last quarter.

- Healthcare: USD8.06bn in 2015 to USD8.37bn in 2016; +3.8%. Forecast broadly in line with lastquarter.Risk/Reward IndexIn Q416, we have revised upwards Puerto Rico's Risk/Reward Index score to 65.7 from 64.5 in the lastquarter (out of 100). The score revision was driven by an improvement in the Industry Rewards index.Puerto Rico continues to stand as the third most attractive market to pharmaceutical investors in theAmericas region, behind the US and Canada. Puerto Rico's score is driven by high spending per capita onmedicine and high patent respect and business environment scores, but dragged down by a small marketsize and low sector value growth.Latest Updates

- In August 2016, Inovio Pharmaceuticals initiated a trial of its preventative Zika vaccine, GLS-5700, inPuerto Rico. Inovio, which is developing GLS-5700 in collaboration with GeneOne Life Science andacademic collaborators from the US and Canada, commenced the first FDA-approved human trial of aZika vaccine in June 2016.

Emerging Business Models Drive Transformation The key objective of this research is to provide in-depth knowledge of the major global pharmaceutical CMO market segments—active pharmaceutical ingredients ...